Google knew that publishers would be unhappy when it implemented measures in 2019 to prevent them from diverting ad sales to competitors, it recognized that its stranglehold over the digital ads market would prevent them from fleeing the internet giant’s ad marketplace, according to internal documents presented at the tech giant’s antitrust trial on Thursday.
Reuers reports that during the ongoing antitrust trial against Google, the U.S. Department of Justice and a coalition of states are seeking to demonstrate that the company unfairly dominated markets for the technology that facilitates online advertising. A key piece of evidence in the case is Google’s removal of a feature that publishers used to reduce their dependence on the tech giant.
Internal emails and documents shown in court revealed that Google employees discussed the company losing revenue because publishers were using their ability to set a higher minimum for bids from Google’s AdX than for other exchanges. As a result, when ads were offered through multiple exchanges, publishers often sold to exchanges other than Google’s.
The documents also showed that Google knew publishers were willing to accept making less money on some ad sales in exchange for the ability to preference other ad tech companies, such as those who charged a lower fee. In a 2017 email thread, Google executives discussed how this helps publishers “keep Google at bay and put pressure on us (similar to any industry).”
As Google prepared to terminate the feature in 2019, employees discussed ways to mitigate potential blowback from publishers. Nitish Korula, then a research scientist at Google, stated in an email that rolling out the change by itself “would be viewed as pure loss of functionality that we’re doing for our own (perceived ‘nefarious/self serving’ reasons).”
Ultimately, Google introduced the change alongside other features that publishers favored, such as ending the practice whereby Google’s ad selling tools would receive a “last look” that allowed it to outbid other sellers. Former Google employee Rahul Srinivasan testified that the changes were meant to simplify the system and make it fairer, with Google estimating that its top 500 publishers saw a median increase of 2.7 percent in ad auction revenue.
However, publishing executives from companies like the New York Times, News Corp, and The Weather Company strongly opposed the loss of control. In a recording of an April 2019 meeting played in court, Jana Meron, then an advertising executive at Business Insider, stated, “You have made it next to impossible for any of us to figure out how to increase our yield with partners outside of Google.”
The trial is expected to last several weeks, and if U.S. District Judge Leonie Brinkema finds that Google violated the law, she will later consider prosecutors’ request to force Google to sell off Google Ad Manager, a platform that includes the company’s publisher ad server and its ad exchange.
Read more at Reuters here.
